What is the loanable funds market? What happens if the real interest rate in the market is held above the equilibrium interest rate?
What will be an ideal response?
The loanable funds market is the market where borrowers obtain funds from savers.
In such a market, if the real interest rate is held above the equilibrium interest rate, the quantity of credit supplied will exceed the quantity of credit demanded. This will create a downward pressure on the real interest rate.
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Refer to Table 2-1. Assume Dina's Diner only produces sliders and hot wings. A combination of 50 sliders and 50 hot wings would appear
A) along Dina's production possibilities frontier. B) inside Dina's production possibilities frontier. C) outside Dina's production possibilities frontier. D) at the vertical intercept of Dina's production possibilities frontier.
Which does not contribute directly to the production of the domestic output of an economy?
A. A full-time student. B. An insurance agent. C. A soldier. D. A police officer.